What's a Music Company Worth? Comparing Tencent's UMG Deal to Other Label Investments

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Music companies are hot investments again -- but the bargains are becoming hard to find

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succinctly described Universal's appeal in a note to investors: “It would be hard to conceive a better story -- a transformed product that drives a multiple of revenue from a very low base after 20 years of disruption, whose take up is being paid for, subsidized by telco and internet companies.” Vivendi raised eyebrows during its 2017 shareholder meeting by saying UMG’s value was $22 billion. The same year, Goldman Sachs put the figure at $23.5 billion.

A handful of recent deals reflect investors’ interest in music, though none have seen sales prices near 32x EBITDA.’s Ithaca Holdings acquired Big Machine Label Group. Sony/ATV bought the remaining interest in EMI Music Publishing. Hasbro acquired Entertainment One . Concord Music Group bought punk label Victory Records and Another Victory publishing company. Downtown Music bought the catalog of label Strictly Confidential.

 

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